Second Fiscal Period Financial Results (Ended November 2007) Basic Principle

Second Fiscal Period Financial Results (ended November 2007) Basic Principle

The Fund will adhere to the following basic principles in order to execute fund management in accordance with solid investment policies for investment in residential properties:

The Fund will aim to secure stable mid-to-long-term earnings through the strategic selection of investment properties and expert asset management based on sufficient understanding of “tenancy demands” Strategy reflecting the characteristics of residential rental property investments and trends in residential property markets.

The Fund will create stable portfolio with consideration to rental levels, investment area, building age and Acquisition types of properties, through continuous acquisition of “PROUD FLAT” from Nomura Real Estate Group and “PRIME URBAN” and “URBAN STAGE” properties from other sources, utilizing our sourcing expertise.

To maximize long-term profitability and asset value of investment properties, the Fund will select the “optimal property management company corresponding to the characteristics of the property,” and at the Asset Management same time, implement flexible and organized leasing and renewal strategies corresponding to tenant turnovers, aging of the portfolio, and expansion of portfolio assets.

The Fund will establish a strong financial base such as “conservative LTV ratio,” ”appropriate control of Finance duration and fixed interest rates,” and “diversification of financial institutions,” in order to manage the Fund in a stable manner, with minimum impact from the financial market conditions.

The Fund will implement fair and transparent management through prevention of conflict of interests and Compliance enforcement of compliance, to maintain our position as a “REIT committed to meeting the trust and expectations of the investors.” Contents

Highlights of the Second Fiscal Period (ended Nov. 30, 2007) Fund Management Results of the Second Fiscal Period

 Highlights of the Second Fiscal Period 2  Results of Investment (1) Acquisition from Nomura Real Estate Development 15 - 17 (2) Acquisition from External Providers 18 - 25 Fund Management Summary  Status of Portfolio 26

 Investment Strategy  Results of Asset Management (1) Investing in Properties Expected to have Stable Demand 4 (1) Portfolio Occupancy Rate 27 (2) Utilize Diverse Sourcing Routes 5 (2) Renovations 28  Investment Results  Results of Financing 29 (1) Results of Acquisition Activities after Listing 6 (2) Results of Portfolio Growth 7  Policies to Secure Stable Cash Flow 8 APPENDIX  Credit Ratings and Additional Issue of Investment Units 9

 Portfolio (as of the end of the 2nd Fiscal Period)  Scheduled Acquisitions after the 2nd Fiscal Period Overview of the Second Fiscal Period Financial Results  Interest-bearing Debts (at the end of the 2nd Fiscal Period)  Income Statement 11  Unitholders (at the end of the 2nd Fiscal Period)  Balance Sheet 12  Organization of the Asset Management Company  3rd and 4th FP Forecast (announced Jan. 21, 2008) 13  Focus on Compliance Highlights of the Second Fiscal Period

1 Highlights of the Second Fiscal Period

Notable Activities

Property Acquisition Asset Management Finance

 Concluded Agreements:  Promote “integrated operational management”  Secured the highest credit ranking among J-REITs in 21 Properties/¥21,366 million through cooperation with the “optimal property July 2007 from 3 rating agencies management company for each property” ⇒ Portfolio including scheduled acquisitions  Promote diversification of lenders 123 Properties/¥100,281million  Secured a high level portfolio occupancy rate (added 2 new institutions) exceeding 95% throughout the 2nd Fiscal Period  Concluded Acquisitions:  Promote conservative financial strategies (95.8% at the end of the 2nd Fiscal Period) 8 Properties/¥8,385 million (long-term/fixed-rates ratio, duration, etc.) (includes the 2 scheduled acquisitions from the 1st Fiscal Period)  Looking ahead to busy leasing periods and execute various building renovations ⇒ Portfolio of acquired properties 97 Properties/¥75,420 million

Financial Overview Second Fiscal Period Comparison with Forecasts (ended November 2007) (released July 17, 2007)

Number of Business Days 183 days －－

Operating Revenues ¥2,484 million + ¥81 million + 3.4 ％

Current Profits ¥954 million + ¥36 million + 4.0 ％

Net Income ¥953 million + ¥36 million + 4.0 ％

Cash Distribution Per Unit ¥14,005 + ¥542 + 4.0 ％

2 Fund Management Summary

3 Investment Strategy (1) Investing in Properties Expected to have Stable Demand

Establish Targets Directed at “Rental Demand with a Broad Tenant Class” Core Elements for Property Selection

Focus Tenant Class Other Tenant Classes ■ Broad tenant demand Middle class tenants, centering on Upper middle class tenants, such as Upper class tenants, such as students and coporate employees in foreign company employees. companies with rent Target their 20s and 30s. subsidization systems, business owners, management class emplayees of foreign Rent Level Appropriate rent level for target tenants Priority on certain level of convenience Priority on location, floor plan, and Priority on prime metropolitan for commuting and rent. specifications/equipments. location, property grade and value-added services. Features Annual income (disposable) is stable. Annual income (disposable) is relatively × Less likely to be affected by economic stable. Relatively less likely to be Annual income (disposable) is trends. affected by economic trends. likely to be affected by economic trends. Railway lines that are well-known, Significantly affected by seasonal Effect of seasonal factors is relatively Demand is limited, and Access railway lines with direct connections factors, such as the concentration of small compared to the middle class. vacancy tends to be longer. to large-scale transfer stations termination and execution of rental Turn-Over agreements in March, when corporate emplayees enter/get transferred and × students enter/ graduate. (Generally) (Generally) (Generally) Rent Target tenant’s travel time to their less than ￥100,000/month ￥100,000-￥150,000/month over ￥150,000/month Commuting Time place of work/school

■ Key points for early lease-up (acquisition of newly developed properties)

Number of units that allow a lease-up Property Size within a short time-frame (Up to approximately 100 units*)

* Excluding sub-lease properties, etc.

(Note) The section circled in the graph above indicates the Fund’s main target tenant class. The Fund will consider investment in properties targeting other tenant classes, if it is deemed to have stable demands from the market characteristics and location viewpoints.

4 Investment Strategy (2) Utilize Diverse Sourcing Routes

Diverse Sourcing Routes for Each Brand

PROUD FLAT PRIME URBAN URBAN STAGE

Brand

Properties planned/developed by Properties planned/developed by Properties planned/developed by companies other than companies other than Nomura Real Estate Development Nomura Real Estate Development Nomura Real Estate Development

Strategic Cooperation with Nomura Real Estate Development The strategic cooperation with Nomura Real Utilization of Networks with Providers Estate Development and undertaking the Utilization of Nomura Real Estate Group Information Networks Acquisition development and acquisition of PROUD Strategy FLAT condominiums making full use of its Proactively utilizing the network with providers built through the management of a private housing related know-how, such as land fund spanning more than 5 years and the Fund’s management extending over 1 year. acquisition, product planning, management, Additionally, seek to collect timely information on properties for sale by utilizing the etc., plays a pivotal role in the Fund’s growth expansive brokerage network held by Nomura Real Estate Group. strategy and will be utilizing the expansive brokerage network held by Nomura Real Estate Group.

Utilize “diverse sourcing routes” to its full extent, in order seek stable acquisition of prime assets

5 Investment Performance (1) Results of Acquisition Activities after Listing

Stable Acquisition Performance in All Brands (millions of yen) PROUD FLAT PRIME URBAN URBAN STAGE Other

Property Name Price Property Name Price Property Name Price Property Name Price PROUD FLAT Yokohama * 2,340 PRIME URBAN Miyanosawa 576 Benefis Hakata Grand Sweet 830 PRIME URBAN Maruyama 283 Benefis Yakuin Minami 351 PRIME URBAN Kanayama * 632 1st Fiscal Period PRIME URBAN Senzoku 536 (After listing) PRIME URBAN Kita Jyuichi Jo 600 PRIME URBAN Odori Higashi 424 13 Properties PRIME URBAN Chiji Kokan 337 9,334 million PRIME URBAN Kita Nijuyo Jo * 503 PRIME URBAN Sapporo Idaimae 731 PRIME URBAN Tsurumai* 1,189 1 Property 2,340 10 Properties 5,813 ーー 2 Properties 1,181 PROUD FLAT Shibuya Sakuragaoka * 800 PRIME URBAN Denenchofu Minami * 900 URBAN STAGE Musashi Kosugi comodo 2,150 Benefis Kashii Verbena 396 PROUD FLAT Shinjuku Kawadacho * 1,010 PRIME URBAN Meguro Ohashi Hills * 3,580 URBAN STAGE Gyotoku Ekimae 561 Benefis Hakata Higashi Grand Sweet 693 PROUD FLAT Shinotsuka 695 PRIME URBAN Meguro Riverside 464 URBAN STAGE Minami Gyotoku V 293 Benefis Chihaya Grand Sweet 545 PROUD FLAT Monzen Nakacho II * 650 PRIME URBAN Nishi Waseda 503 URBAN STAGE Gyotoku 948 2nd Fiscal Period PROUD FLAT Shirogane Takanawa * 3,510 PRIME URBAN Nakano Kamitakada * 640 PROUD FLAT Monzen Nakacho I * 1,130 PRIME URBAN Minami Karasuyama 840 21 Properties PRIME URBAN Karasuyama Galleria 645 21,366 million PRIME URBAN Karasuyama Court 413

6 Properties 7,795 8 Properties 7,985 4 Properties 3,952 3 Properties 1,634 PROUD FLAT Kamioooka * 2,770 PRIME URBAN Nagamachi Icchome 1,110 URBAN STAGE Hongo Ikizaka 647 Koganei Habitation 2,390 PRIME URBAN Yaotome Chuo 428 URBAN STAGE Shinjuku Ochiai 635 Musashino Green Hills 1,590 URBAN STAGE Kamikitazawa 738 3rd Fiscal Period URBAN STAGE Shinkawa 2,250 (As of Feb. 28) URBAN STAGE Kawasaki 115

10 Properties 12,673 million

1 Property 2,770 2 Properties 1,538 5 Properties 4,385 2 Properties 3,980 Total 44 Properties 8 Properties 12,905 20 Properties 15,336 9 Properties 8,337 7 Properties 6,795 43,373 million

(Note) The properties mentioned above is the Fund's portfolio from the day of listing to February 28, 2008. The price refers to the acquisition price, all of which are rounded down to the nearest million. (Note) The building names with a (*) mark are tentative names.

Through the “utilization of diverse sourcing routes” achieved stable acquisition performance for all brands

6 Investment Performance (2) Growth of Asset Size

The Growth of Portfolio through Acquisition of Prime Properties

■ Illustration of Expansion of Asset Size ■

(billions of yen) Total Assets Scheduled Acquisitions Aquired Properties Stable Acquisition of Prime Properties 300 billion 300.0 Growth of 250.0 44 Properties/¥43.3 billion 200.0 133 Properties 123 Properties 113.9 billion 150.0 100.2 billion 102 Properties 78.9 billion 100.0 89 Properties 69.5 billion

50.0

Time of Listing End of 1st FP End of 2nd FP Present February May November February 2007 2007 2007 2008

Aiming for “steady portfolio growth” through stable acquisition of prime properties

7 Policies to Secure Stable Cash Flow (Guaranteed rents, etc. in new properties)

“Stable Earnings until Increase in Occupancy Rate” + “Pursue the Upside Following Lease-up”

Changes in rental income of newly developed properties (image chart)

High Occupancy Rate

Properties that have guaranteed rental fees, etc. Secure stable cash flow even at the start of the initial operation

Regular properties Increase cash flow in accordance with the progress of lease-up

Low Occupancy Rate

Commence Leasing Lease-up Period Period of Stable (Time of Completion) (After Completion) Occupancy Rate

Properties which use the method of guaranteed fees, etc. (Scheduled) (Scheduled) Property Name Location Leasable Units Completion Date Acquisition Date PRIME URBAN Sapporo Idaimae Sapporo-shi, Hokkaido 58 units March 2008 March 26, 2008 PRIME URBAN Nagamachi Icchome Sendai-shi, Miyagi 60 units January 2008 February 1, 2008 PRIME URBAN Yaotome Chuo Sendai-shi, Miyagi 43 units January 2008 February 1, 2008 PRIME URBAN Tsurumai (tentative name) Nagoya-shi, Aichi 104 units July 2008 March 5, 2009 Benefis Kashii Verbena Fukuoka-shi, Fukuoka 39 units February 2008 March 5, 2008 Benefis Hakata Higashi Grand Sweet Fukuoka-shi, Fukuoka 65 units March 2008 March 19, 2008 Benefis Chihaya Grand Sweet Fukuoka-shi, Fukuoka 48 units March 2008 March 28, 2008

Use the most appropriate methods for early revenues by regarding time of completion, market scale, etc.

8 Credit Ratings and Additional Issue of Investment Units

Credit Ratings

Rating Agency Rating Outlook

Japan Credit Rating Agency, Ltd. Long-term Senior Debt Rating: AA Stable

Moody’s Investors Service Issuer Rating: A1 Stable

Long-term Corporate Credit Rating: A+ Standard & Poor’s Stable Short-term Corporate Credit Rating: A-1

Selecting the most appropriate procurement methods from “Diverse funding procurement methods,” which include the issuance of investment corporation bonds

Additional Issue of Investment Units

 Issuance resolution date: January 21, 2008  Number of units issued: 27,300 units (Public Offering), 1,365 units (Third-party Allotment)  Offer price ¥451,780 per unit (2% discounted from the closing price on Feb. 5, 2008)  Proceeds ¥11,918 million (Public Offering)  Payment date: February 13, 2008 (Public Offering)  Number of units after new issue: 95,400 units (After Public Offering)

Aim at a balanced growth in all aspects of “Property acquisition,” “Asset management,” and “Financial Strategies”

9 Overview of the Financial Results

10 Income Statement

First Fiscal Period Second Fiscal Period

From August 3, 2006 From June1, 2007 Classification To May 31, 2007 To November 30, 2007

Amount (￥000) Ratio (%) Amount (￥000) Ratio (%)

Real Estate Rental Business Revenues 2,304,704 100.0 2,484,628 100.0 *1 *1 [Real Estate Rental Business Revenues] Rental Business Revenues 2,101,518 91.2 2,372,329 95.5 As of the end of the 2nd Fiscal Period, the portfolio consists of 97 properties/¥75.4 billion (total acquisition price). The occupancy rate for the Other Rental Business Revenues 203,185 8.8 112,298 4.5 portfolio at the end of the 2nd Fiscal Period is 95.8%. Real Estate Rental Business Expenses 963,342 41.8 896,964 36.1

Real Estate Rental Business Expenses 559,993 24.3 446,059 18.0 *2 *2 [Repair Expenses] Tax and Public Dues 5,176 0.2 53,299 2.1 *3 Repair expenses reported as expenses in the 2nd Fiscal Period is ¥85,269,000. In combination with ¥31,586,000 in capital expenditures, a Depreciation and Amortization 398,173 17.3 397,604 16.0 total of ¥116,856,000 in construction was carried out. Real Estate Rental Business Profits and Losses 1,341,361 58.2 1,587,663 63.9 Asset Management Fees 141,031 6.1 182,851 7.4 *3 [Tax and Public Dues] Other Operating Expenses 122,100 5.3 140,999 5.7 During the 2nd Fiscal Period, of the 97 properties in the portfolio, 57 Operating Income 1,078,229 46.8 1,263,812 50.9 properties have reported fixed asset taxes and urban planning taxes in the Non-Operating Revenues 1,003 0.0 6,265 0.3 year 2007 as expenses. Fixed asset taxes and urban planning taxes adjusted with the seller at the time of acquisition (¥45,841,000) have been Non-Operating Expenses 525,942 22.8 315,335 12.7 included in the acquisition price. Current Profits 553,291 24.0 954,743 38.4 Net Income before Tax 553,291 24.0 954,743 38.4 Corporate Income Tax, etc. 1,515 0.1 999 0.0 Net Income before Tax 551,775 23.9 953,743 38.4 Retained Earnings Brought Forw ard － 0.0 29 0.0 Retained Earnings at the end of the Fiscal Period 551,775 23.9 953,773 38.4

11 Balance Sheet

Assets Liabilities and Net Assets

Fist Fiscal Period Second Fiscal Period First Fiscal Period Second Fiscal Period Items as of May 31, 2007 as of Nov. 30, 2007 Items as of May 31, 2007 as of Nov. 30, 2007 Amount (￥000) Ratio (%) Amount (￥000) Ratio (%) Amount (￥000) Ratio (%) Amount (￥000) Ratio (%) Current Assets 6,941,125 9.2 3,974,905 4.9 Current Liabilities 1,245,843 1.7 5,098,162 6.3 Cash and cash equivalents 5,064,215 6.7 2,062,189 2.5 Trade accounts payable 186,131 0.2 109,759 0.1 Cash and cash equivalent in trust 1,788,634 2.4 1,820,953 2.3 Short-term loans 440,000 0.6 4,360,000 5.4 *2 Other current assets 88,274 0.1 91,762 0.1 Other accounts payable 235,048 0.3 157,649 0.2 Fixed Assets 68,372,764 90.8 76,915,836 95.1 Tangible fixed assets 68,359,040 90.8 76,902,158 95.1 *1 Taxes payable 1,346 0.0 653 0.0 Real estate 9,676,898 12.8 18,435,659 22.8 Accrued expenses 101,795 0.1 153,568 0.2 Building 3,871,120 5.1 7,332,739 9.1 Rent received in advance 278,047 0.4 314,883 0.4 Land 5,805,777 7.7 11,102,920 13.7 Deposits payable 3,473 0.0 1,647 0.0 Real estate in trust 58,651,995 77.9 58,401,685 72.2 Fixed Liabilities 32,260,599 42.8 33,583,135 41.5 Building in trust 20,642,397 27.4 20,384,968 25.2 Long-term loans 31,500,000 41.8 32,740,000 40.5 *2 Land in trust 38,009,597 50.5 38,016,717 47.0 Security deposits 63,971 0.1 153,032 0.2 Construction in progress 30,147 0.0 64,812 0.1 Securitiy deposits in trust 696,628 0.9 690,102 0.9 Intangible fixed assets 1,774 0.0 1,635 0.0 Total Liabilities 33,506,442 44.5 38,681,297 47.8 Other intangible fixed assets 1,774 0.0 1,635 0.0 Unitholders Equity 41,807,447 55.5 42,209,444 52.2 Investment and other assets 11,949 0.0 12,043 0.0 Unitholders capital 41,255,671 54.8 41,255,671 51.0 Deposits received 10,298 0.0 10,421 0.0 Long-term repaid expenses 1,651 0.0 1,622 0.0 Retained earnings 551,775 0.7 953,773 1.2 Total Assets 75,313,889 100.0 80,890,742 100.0 Total New Assets 41,807,447 55.5 42,209,444 52.2 Total Liabilities and Net Assets 75,313,889 100.0 80,890,742 100.0

*1 Tangible fixed assets (unit: millions of yen) *2 Loans

Acquisition Accumulated (Depreciation Book value Balance of interest-bearing debts (millions of yen) 37,100 Price depreciation for current FP) at end of FP Real Estate 77,633 795 (397) 76,837 short-term + long-term loans Building 7,428 95 (80) 7,332 Total asset interest-bearing debt ratio total assets 45.9% Land 11,102 －－ 11,102 Building in trust 21,085 700 (317) 20,384 long-term loans Land in trust 38,016 －－ 38,016 Long-term interest-bearing debt ratio long-term + short-term loans 88.2%

12 Forecasts for 3rd and 4th Fiscal Period (announced Jan. 21, 2008)

3rd Fiscal Period Forecasts 4th Fiscal Period Forecasts (December 1, 2007-May 31, 2008) (June 1, 2008-November 30, 2008)

Rental Business Revenues 3,226 million yen Rental Business Revenues 3,693 million yen

Rental Business Expenses 1,299 million yen Rental Business Expenses 1,395 million yen

Asset Management Fees 215 million yen Asset Management Fees 368 million yen

Other Operating Expenses 160 million yen Other Operating Expenses 180 million yen

Operating Income 1,550 million yen Operating Income 1,748 million yen

Non-Operating Profit/Loss 480 million yen Non-Operating Profit/Loss 471 million yen

Current Profits 1,069 million yen Current Profits 1,276 million yen

Net Income 1,068 million yen Net Income 1,275 million yen

Cash Distribution per Unit 11,043 yen Cash Distribution per Unit 13,180 yen

Total Investment Units at Total Investment Units at 96,765 units 96,765 units end of Fiscal Period end of Fiscal Period

[Managing Assets] [Managing Assets] Calculation based on 129 properties*, adding the 32 properties (scheduled to acquire Calculation based on 131 properties*, adding the 2 properties (scheduled to acquire during the 3rd Fiscal Period as of January 21, 2008) to the 97 properties held as of during the 4th Fiscal Period as of January 21, 2008) to the 129 properties held as of November 30, 2007 (end of 2nd Fiscal Period). May 31, 2008 (end of 3rd Fiscal Period). * As of February 28, 2008, the portfolio consists of 114 properties. * As of February 28, 2008, the portfolio consists of 114 properties. * URBAN STAGE Kawasaki, acquired February 26, 2008, is not included. * URBAN STAGE Kawasaki, acquired February 26, 2008, is not included. [Depreciation] [Depreciation] ¥554 million is expected. ¥644 million is expected. [Loans] [Loans] Assumed that loans as of May 31, 2008 (end of 3rd Fiscal Period) will be a total of Assumed that loans as of November 30, 2008 (end of 4th Fiscal Period) will be a total ¥53,870 million, through loans for the acquisition of new property already scheduled of ¥58,718 million, with loans for the acquisition of new property already scheduled as as of January 21, 2008. of January 21, 2008.

13 Fund Management Results

14 Results of Investment (1) Acquisition from Nomura Real Estate Development

PROUD FLAT Shibuya Sakuragaoka PROUD FLAT Shinjuku Kawadacho (tentative name) (tentative name)

Main Railway Access: 5 minute walk to Shibuya Station on the JR Yamanote Main Railway Access: 6 minute walk to Wakamatsu Kawada Station on the and Saikyo Lines, Tokyo Metro Ginza and Hanzomon Toei Subway Oedo Line Lines, Tokyu Toyoko and Denentoshi Lines 8 minute walk to Akebonobashi Station on the Toei Subway Shinjuku Line Leasable Units: 30 Leasable Units: 41 Scheduled Acquisition Price: ¥800 million Scheduled Acquisition Price: ¥1,010 million Scheduled Acquisition Date: April 21, 2008 (3rd Fiscal Period) Scheduled Acquisition Date: April 21, 2008 (3rd Fiscal Period) Acquisition Route: Nomura Real Estate Development Co., Ltd. Acquisition Route: Nomura Real Estate Development Co., Ltd.

In ¥90,000s for 1R units Rent Level In ¥120,000s for 1K units Rent Level In ¥110,000s for 1DK units

Within walking distance of Shibuya Station, a large-scale Access Access Toei Subway Oedo Line and Shinjuku Line transfer station where 7 lines interchange.

Walking distance to Shibuya Station area Approximately 10 minutes to the Shinjuku area Commuting Time Commuting Time Approximately 20 minutes to other major business areas Approximately 20 minutes to the Otemachi area

15 Results of Investment (1) Acquisition from Nomura Real Estate Development

PROUD FLAT Shinotsuka PROUD FLAT Monzen Nakacho II (tentative name) (tentative name)

Main Railway Access: 5 minute walk to Shinotsuka Station on the Tokyo Metro Main Railway Access: 7 minute walk to Monzen Nakacho Station on the Marunouchi Line and Otsuka Station on the JR Tokyo Metro Tozai Line Yamanote Line 11 minute walk to Monzen Nakacho Station on the Toei Subway Oedo Line Leasable Units: 35 Leasable Units: 35 Scheduled Acquisition Price: ¥695 million Scheduled Acquisition Price: ¥650 million Scheduled Acquisition Date: April 21, 2008 (3rd Fiscal Period) Scheduled Acquisition Date: April 21, 2008 (3rd Fiscal Period) Acquisition Route: Nomura Real Estate Development Co., Ltd. Acquisition Route: Nomura Real Estate Development Co., Ltd.

Rent Level In ¥100,000s for 1K units Rent Level In ¥90,000 for 1K units

Access Tokyo Metro Marunouchi Line and JR Yamanote Line Access Tokyo Metro Tozai Line and Toei Subway Oedo Line

Approximately 20 minutes to Otemachi/Tokyo/Shinjuku areas Approximately 15 minutes to Otemachi/Nihonbashi areas Commuting Time Commuting Time Approximately 10 minutes to the Ikebukuro area Approximately 30 minutes to the Roppongi area

16 Results of Investment (1) Acquisition from Nomura Real Estate Development

PROUD FLAT Shirogane Takanawa PROUD FLAT Monzen Nakacho I (tentative name) (tentative name)

Main Railway Access: 5 minute walk to Shirogane Takanawa Station on the Main Railway Access: 5 minutes to Monzen Nakacho Station on the Tokyo Tokyo Metro Namboku Line and Toei Subway Mita Line Metro Tozai Line 8 minutes to Monzen Nakacho Station on the Toei Leasable Units: 106 Subway Oedo Line Scheduled Acquisition Price: ¥3,510 million Leasable Units: 55 Scheduled Acquisition Date: September 5, 2008 (4th Fiscal Period) Scheduled Acquisition Price: ¥1,130 million Acquisition Route: Nomura Real Estate Development Co., Ltd. Scheduled Acquisition Date: August 5, 2008 (4th Fiscal Period) Acquisition Route: Nomura Real Estate Development Co., Ltd.

Rent Level In ¥120,000s for 1K units Rent Level In ¥100,000s for 1K units

Access Tokyo Metro Namboku Line and Toei Subway Mita Line Access Tokyo Metro Ttozai Line and Toei Subway Oedo Line

Approximately 15 minutes to the Roppongi area Approximately 15 minutes to Otemachi/Nihonbashi areas Commuting Time Commuting Time Approximately 20 minutes to Otemachi/Akasaka areas Approximately 25 minutes to the Roppongi area

17 Results of Investment (2) Acquisition from External Providers

PRIME URBAN Meguro Riverside PRIME URBAN Nishi Waseda

Main Railway Access: 9 minute walk to Meguro Station on the JR Yamanote Main Railway Access: 10 minute walk to Waseda Station on the Tokyo Metro Line, Tokyu Meguro Line, Tokyo Metro Namboku Line, Tozai Line and Toei Subway Mita Line Leasable Units: 28 Leasable Units: 24 Scheduled Acquisition Price: ¥503 million Scheduled Acquisition Price: ¥464 million Scheduled Acquisition Date: September 27, 2007 (2nd Fiscal Period) Scheduled Acquisition Date: September 27, 2007 (2nd Fiscal Period) Acquisition Route: Existing provider Acquisition Route: Existing provider

Rent Level In ¥90,000s for 1K units Rent Level In ¥90,000s for 1K units

JR Yamanote Line, Tokyu Meguro Line, Tokyo Metro Access Access Tokyo Metro Tozai Line Namboku Line, and Toei Subway Mita Line

Approximately 15 minutes to Ebisu/Shibuya areas Approximately 25 minutes to Otemachi/Nihonbashi areas Commuting Time Commuting Time Approximately 20 minutes to Shinjuku/Roppongi areas Walking distance to Waseda University and other schools

18 Results of Investment (2) Acquisition from External Providers

PRIME URBAN Karasuyama Galleria PRIME URBAN Karasuyama Court

Main Railway Access: 2 minute walk to Chitose Karasuyama Station on the Main Railway Access: 8 minute walk to Chitose Karasuyama Station on the Keio Line Keio Line 7 minute walk to Roka Koen Station on the Keio Line Leasable Units: 33 Leasable Units: 23 Scheduled Acquisition Price: ¥645 million Scheduled Acquisition Price: ¥413 million Scheduled Acquisition Date: September 28, 2007 (2nd Fiscal Period) Scheduled Acquisition Date: September 28, 2007 (2nd Fiscal Period) Acquisition Route: Existing provider Acquisition Route: Existing provider

Rent Level In ¥100,000s for 1K units Rent Level In ¥90,000s for 1K units

Access Keio Line (Extends on to Toei Subway Shinjuku Line) Access Keio Line (extends on to Toei Subway Shinjuku Line)

Approximately 15-20 minutes to Shinjuku/Shibuya areas Approximately 25 minutes to Shinjuku/Shibuya areas Commuting Time Commuting Time Approximately 35 minutes to the Otemachi area Approximately 40 minutes to the Otemachi area

19 Results of Investment (2) Acquisition from External Providers

PRIME URBAN Meguro Ohashi Hills PRIME URBAN Denenchofu Minami (tentative name) (tentative name)

Main Railway Access: 6 minute walk to Ikejiri Ohashi Station on the Tokyu Main Railway Access: 14 minute walk to Tamagawa Station on the Tokyu Denentoshi Line Toyoko and Meguro Lines 4 minute walk to Numabe Station on the Tokyu Leasable Units: 99 Tamagawa Line Scheduled Acquisition Price: ¥3,580 million Leasable Units: 44 Scheduled Acquisition Date: March 21, 2008 (3rd Fiscal Period) Scheduled Acquisition Price: ¥900 million Acquisition Route: New provider Scheduled Acquisition Date: March 21, 2008 (3rd Fiscal Period) Acquisition Route: New provider

In ¥130,000s for 1K units Rent Level Rent Level In ¥90,000s for 1K units In ¥200,000s for 1LDK units

Tokyu Denentoshi Line Tokyu Toyoko and Meguro Lines Access Access (extends on to Tokyo Metro Hanzomon Line) (extends on to Tokyo Metro Hibiya and Namboku Lines)

Walking distance to Shibuya/Daikanyama areas Approximately 30 minutes to the Shibuya area Commuting Time Commuting Time Approximately 25 minutes to the Otemachi area Approximately 35 minutes to the Roppongi area

20 Results of Investment (2) Acquisition from External Providers

PRIME URBAN Nakano Kamitakada PRIME URBAN Minami Karasuyama (tentative name)

Main Railway Access: 5 minute walk to Arai Yakushimae Station on the Seibu Main Railway Access: 3 minute walk to Chitose Karasuyama Station on the Shinjuku Line Keio Line Leasable Units: 33 Leasable Units: 41 Scheduled Acquisition Price: ¥640 million Scheduled Acquisition Price: ¥840 million Scheduled Acquisition Date: March 3, 2008 (3rd Fiscal Period) Scheduled Acquisition Date: September 28, 2007 (2nd Fiscal Period) Acquisition Route: Existing provider Acquisition Route: New provider

In ¥80,000s for 1K units Rent Level Rent Level In ¥100,000s for 1K units In ¥150,000s for 1LDK units

Access Seibu Shinjuku Line Access Keio Line (extends on to Toei Subway Shinjuku Line)

Approximately 20 minutes to the Shinjuku area Approximately 20 minutes to Shinjuku/Shibuya areas Commuting Time Commuting Time Approximately 35 minutes to Otemachi/Nihonbashi areas Approximately 35 minutes to the Otemachi area

21 Results of Investment (2) Acquisition from External Providers

URBAN STAGE Musashi Kosugi comodo URBAN STAGE Gyotoku Ekimae

Main Railway Access: 5 minute walk to Musashi Kosugi Station on the Tokyu Main Railway Access: 7 minute walk to Gyotoku Station on the Tokyo Metro Toyoko and Meguro Lines Tozai Line 4 minute walk to Musashi Kosugi Station on the JR Leasable Units: 46 Nambu Line Scheduled Acquisition Price: ¥561 million Leasable Units: 56 Scheduled Acquisition Date: December 4, 2007 (3rd Fiscal Period) Scheduled Acquisition Price: ¥2,150 million Acquisition Route: Existing provider Scheduled Acquisition Date: September 28, 2007 (2nd Fiscal Period) Acquisition Route: New provider

In ¥170,000s for 2LDK units Rent Level Rent Level In ¥70,000s for 1K units In ¥190,000s for 3LDK units

Tokyu Toyoko and Meguro Lines Access Access Tokyo Metro Tozai Line (extends on to Tokyo Metro Hibiya and Namboku Lines)

Approximately 20 minutes to Shibuya/Yokohama areas Commuting Time Commuting Time Approximately 30 minutes to Otemachi/Nihonbashi areas Approximately 30-40 minutes to Roppongi/Otemachi areas

22 Results of Investment (2) Acquisition from External Providers

URBAN STAGE Minami Gyotoku V URBAN STAGE Gyotoku

Main Railway Access: 8 minute walk to Minami Gyotoku Station on the Tokyo Main Railway Access: 10 minute walk to Gyotoku Station on the Tokyo Metro Metro Tozai Line Tozai Line Leasable Units: 38 Leasable Units: 77 Scheduled Acquisition Price: ¥293 million Scheduled Acquisition Price: ¥948 million Scheduled Acquisition Date: December 14, 2007 (3rd Fiscal Period) Scheduled Acquisition Date: February 15, 2008 (3rd Fiscal Period) Acquisition Route: Existing provider Acquisition Route: Existing provider

Rent Level In ¥60,000s for 1K units Rent Level In ¥70,000s for 1K units

Access Tokyo Metro Tozai Line Access Tokyo Metro Tozai Line

Commuting Time Approximately 30 minutes to Otemachi/Nihonbashi areas Commuting Time Approximately 35 minutes to Otemachi/Nihonbashi areas

23 Results of Investment (2) Acquisition from External Providers

Benefis Kashii Verbena Benefis Hakata Higashi Grand Sweet

Main Railway Access: 8 minute walk to Kashii Station on the JR Kagoshima Main Railway Access: 6 minute walk to Yoshizuka Station on the JR Main and Kashii Lines Kagoshima Main and Sasaguri Lines 7 minute walk to Nishitetsu Kashii Station on the Leasable Units: 65 Nishitetsu Kaizuka Line Scheduled Acquisition Price: ¥693 million Leasable Units: 39 Scheduled Acquisition Date: March 19, 2008 (3rd Fiscal Period) Scheduled Acquisition Price: ¥396 million Acquisition Route: Existing provider (Broker: Nomura Real Estate Urban Net) Scheduled Acquisition Date: March 5, 2008 (3rd Fiscal Period)

Acquisition Route: Existing provider (Broker: Nomura Real Estate Urban Net)

In ¥50,000s for 1R units Rent Level In ¥60,000s for 1DK units Rent Level In ¥50,000-¥60,000s for 1DK units

Access JR Kagoshima Main Line and Nishitetsu Kaizuka Line Access JR Kagoshima Main Line

Approximately 20 minutes to the Hakata area Commuting Time Commuting Time Approximately 10 minutes to the Hakata area Approximately 40 minutes to the Tenjin area

24 Results of Investment (2) Acquisition from External Providers

Benefis Chihaya Grand Sweet

Portfolio as of the end of the 2nd FP (including scheduled acquisitions)

Number of Properties: 123 Total Acquisition Price: ¥100,281 million

Main Railway Access: 5 minute walk to Chihaya Station on the JR Kagoshima Main Line and Nishitetsu Chihaya Station on the Nishitetsu Kaizuka Line Leasable Units: 48 Scheduled Acquisition Price: ¥545 million Scheduled Acquisition Date: March 28, 2008 (3rd Fiscal Period) Portfolio as of the end of the 2nd FP Acquisition Route: Existing provider (Broker: Nomura Real Estate Urban Net)

Rent Level In ¥60,000s for 1LDK and 2K units Number of Properties: 97 Total Acquisition Price: ¥75,420 million

Access JR Kagoshima Main Line and Nishitetsu Kaizuka Line

Approximately 15 minutes to the Hakata area Commuting Time Approximately 30 minutes to the Tenjin area

25 Status of Portfolio (97 Properties at the end of 2nd Fiscal Period)

Top 5 Properties Diversification Within Assets Building Age Over 10 years Under 1 year ¥10.93 billion

Top 10 Properties Considering the combination of Improve portfolio stability ¥18.68 billion various building age to avoid through promotion of 5-10 years concentration of large-scale diversification Other 87 Properties repair expenses in the future ¥56.74 billion Total Portfolio 97 Properties/¥75.42 billion 3-5 years 1-3 years

Investment Area Other Vicinity Floor Area per Unit Over Retail & Office Areas of Tokyo 70 sq. meters 50-70 sq. meters Other Areas (Kanagawa, Chiba, Vicinity of Tokyo Saitama) For the time being, invest in 70% or more properties targeting Other Areas single/DINKS/young family 30% or less households Tokyo Tokyo (23 wards) (excluding the 23 wards) 30-50 sq. meters Under 30 sq. meters

Over 10 min. Within 5 min. Nearest Station on Foot Units per Property Over 100 Units Under 30 Units

Invest in properties with up to Property selection focusing on approximately 100 units, accessibility to the nearest allowing for 100% lease-up within a short time-frame railway station 5-10 min. (Note) excludes sub-lease properties, etc.

50-100 Units 30-50 Units (Note) Of the graphs above, “Floor area per unit” is based on units, the others are based on acquisition price. 26 Result of Management (1) Portfolio Occupancy Rate

Stabilized around 96%

Occupancy Rate (%) Leasable Floor Space (㎡) 95.4% 96.2% 96.4% 96.9% 96.1% 95.9% 95.8% 100.0 150,000

80.0 120,000

60.0 90,000

40.0 60,000

20.0 30,000

0.0 0 2007 2007 2007 2007 2007 2007 2007 May June July August September October November (end of 1st FP) (end of 2nd FP)

Leasable Floor Space (㎡) Vicinity of Tokyo Other Areas Total

(Note) The occupancy rate figures apply to the Total occupancy rate of the portfolio

Apply management which bring out the greatest potential for each property through the “selection of optimal property management company for each property” and the “integrated operation management with the asset management and property management companies”.

27 Result of Management (2) Renovations

PRIME URBAN Yamahana (previously Presence S17) URBAN STAGE Minami Gyotoku II & III

 Main details of renovations  Main details of renovations ⇒ Changing the signs (building nameplate, etc.), etc. ⇒ Change in floor covering (carpet→hard tile flooring) ⇒ Enlarge parking space area ⇒ Renewal of fittings, washbasin faucets, and showerheads

Other Properties

URBAN STAGE Toritsu Daigaku URBAN STAGE Kachidoki

 Main details of renovations  Main details of renovations ⇒ Change in floor covering (carpet→flooring) ⇒ Change in room plan (2DK Japanese style→adjustable 1LDK unit) ⇒ Renewal of prefabricated bath and system kitchen ⇒ Change to flooring, renewal of prefab-bath & system kitchen

28 Results of Financing (Long-term/Fixed Interest-rate Ratio and LTV Ratio, etc.)

Long-term Interest-bearing Debt Ratio Fixed Interest-rate Debt Ratio Diversification of maturity

(millions of y en) 15,000

Short-term Floating Interest Rate ¥4.36 billion ¥9.30 billion 11,000

10,000

5,440 4,500 5,000 Long-term Fixed Interest Rate 4,000 3,500 ¥32.74 billion ¥27.8 billion 3,360 2,200

(Note) “Fixed interest rate” includes floating 1,000 800 1,300 interest rate borrowings which have been fixed through interest rate swaps. 0 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP Loan to Value Ratio and Duration Diversification of Lenders

City Banks (3) Trust Banks (3) Regional Banks (2) Bank of Tokyo-Mitsubishi UFJ Mitsubishi UFJ Trust and Banking Chiba Bank LTV ratio at the end of the 2nd Fiscal Period Sumitomo Mitsui Banking Sumitomo Trust and Banking Iyo Bank Mizuho Corporate Bank Nomura Trust and Banking (November 30, 2007) 45.9％ Average remaining duration Insurance Companies (4) Others (2) Dai-ichi Mutual Live Insurance Development Bank of Japan at the end of the 2nd Fiscal Period* 3.6 years Taiyo Life Insurance Aozora Bank (November 30, 2007) Daido Life Insurance Mitsui Sumitomo Insurance * Average remaining duration for long-term loans 4.0 years

29 ＡＰＰＥＮＤＩＸ

30 Portfolio (as of the end of the 2nd Fiscal Period)

Acquisition Price Percent of Leasable Leasable Occupation Rate # Name of Property Location (Thousands of Yen) Total (%) Space (㎡) Units (Units) (end of 2nd FP) 1 PROUD FLAT Yoyogi Uehara Shibuya-ku, Tokyo 1,100,000 1.5 1,151.34 44 100.0 2 PROUD FLAT Hatsudai Shibuya-ku, Tokyo 865,000 1.1 958.98 31 100.0 3 PROUD FLAT Gakugei Daigaku Meguro-ku, Tokyo 812,000 1.1 934.39 41 100.0 4 PROUD FLAT Meguro Gyoninzaka Meguro-ku, Tokyo 882,000 1.2 855.23 40 100.0 5 PROUD FLAT Sumida Riverside Chuo-ku, Tokyo 2,260,000 3.0 3,055.21 110 100.0 6 PROUD FLAT Kagurazaka Shinjuku-ku, Tokyo 1,540,000 2.0 1,793.43 70 100.0 7 PROUD FLAT Waseda Shinjuku-ku, Tokyo 1,110,000 1.5 1,450.91 60 98.4 8 PROUD FLAT Sangen Jaya Setagaya-ku, Tokyo 1,350,000 1.8 1,277.82 48 98.1 9 PROUD FLAT Kamata Ota-ku, Tokyo 1,140,000 1.5 1,541.64 67 100.0 10 PROUD FLAT Kiyosumi Shirakawa Koto-ku, Tokyo 900,000 1.2 1,209.56 55 100.0 11 PRIME URBAN Akasaka Minato-ku, Tokyo 956,000 1.3 1,062.05 25 93.3 12 PRIME URBAN Tamachi Minato-ku, Tokyo 941,000 1.2 1,107.36 48 97.9 13 PRIME URBAN Ebisu Minami Shibuya-ku, Tokyo 947,000 1.3 881.89 21 93.0 14 PRIME URBAN Yoyogi Shibuya-ku, Tokyo 408,000 0.5 439.56 19 88.4 15 PRIME URBAN Bancho Chiyoda-ku, Tokyo 1,170,000 1.6 1,277.04 52 92.8 16 PRIME URBAN Chiyoda Fujimi Chiyoda-ku, Tokyo 707,000 0.9 793.87 32 97.2 17 PRIME URBAN Iidabashi Chiyoda-ku, Tokyo 2,030,000 2.7 2,087.70 90 94.7 18 PRIME URBAN Ebisu Meguro-ku, Tokyo 1,200,000 1.6 1,444.40 29 93.1 19 PRIME URBAN Naka Meguro Meguro-ku, Tokyo 1,320,000 1.8 1,302.42 49 93.9 20 PRIME URBAN Gakugei Daigaku Meguro-ku, Tokyo 886,000 1.2 1,008.39 32 100.0 21 PRIME URBAN Senzoku Meguro-ku, Tokyo 536,000 0.7 655.27 22 93.7 22 PRIME URBAN Meguro Riverside Meguro-ku, Tokyo 464,000 0.6 453.77 24 100.0 23 PRIME URBAN Nishi Shinjuku I Shinjuku-ku, Tokyo 1,290,000 1.7 1,459.86 60 95.2 24 PRIME URBAN Nishi Shinjuku II Shinjuku-ku, Tokyo 1,000,000 1.3 1,162.55 46 100.0 25 PRIME URBAN Shinjuku Naitomachi Shinjuku-ku, Tokyo 512,000 0.7 578.18 14 93.0 26 PRIME URBAN Nishi Waseda Shinjuku-ku, Tokyo 503,000 0.7 507.11 28 100.0 27 PRIME URBAN Sangen Jaya Setagaya-ku, Tokyo 835,000 1.1 874.15 33 94.2 28 PRIME URBAN Minami Karasuyama Setagaya-ku, Tokyo 840,000 1.1 1,049.73 41 7.3 29 PRIME URBAN Karasuyama Galleria Setagaya-ku, Tokyo 645,000 0.9 835.05 33 100.0 30 PRIME URBAN Karasuyama Court Setagaya-ku, Tokyo 413,000 0.5 576.20 23 100.0 31 PRIME URBAN Shinagawa Nishi Shinagawa-ku, Tokyo 624,000 0.8 961.25 46 91.8 32 PRIME URBAN Osaki Shinagawa-ku, Tokyo 1,700,000 2.3 2,106.16 99 99.0 33 PRIME URBAN Omori Ota-ku, Tokyo 824,000 1.1 1,190.70 54 98.1

31 Portfolio (as of the end of the 2nd Fiscal Period)

Acquisition Price Percent of Leasable Leasable Occupation Rate # Name of Property Location (Thousands of Yen) Total (%) Space (㎡) Units (Units) (end of 2nd FP) 34 PRIME URBAN Kita Senzoku Ota-ku, Tokyo 576,000 0.8 834.90 46 93.5 35 PRIME URBAN Nishi Ogikubo Suginami-ku, Tokyo 435,000 0.6 543.09 24 100.0 36 PRIME URBAN Otsuka Toshima-ku, Tokyo 794,000 1.1 944.99 46 95.7 37 PRIME URBAN Monzen Nakacho Koto-ku, Tokyo 2,200,000 2.9 3,127.94 117 98.3 38 PRIME URBAN Kameido Koto-ku, Tokyo 705,000 0.9 1,117.34 52 100.0 39 PRIME URBAN Sumiyoshi Koto-ku, Tokyo 552,000 0.7 813.52 40 100.0 40 PRIME URBAN Kinshi Koen Sumida-ku, Tokyo 1,180,000 1.6 1,886.50 77 100.0 41 PRIME URBAN Kinshicho Sumida-ku, Tokyo 668,000 0.9 991.62 49 100.0 42 PRIME URBAN Hirai Edogawa-ku, Tokyo 700,000 0.9 1,095.91 53 90.5 43 PRIME URBAN Kasai Edogawa-ku, Tokyo 637,000 0.8 905.81 45 84.4 44 PRIME URBAN Kasai II Edogawa-ku, Tokyo 958,000 1.3 1,437.84 68 98.5 45 PRIME URBAN Urayasu Urayasu-shi, Chiba 840,000 1.1 1,264.84 60 98.3 46 PRIME URBAN Gyotoku I Ichikawa-shi, Chiba 635,000 0.8 1,151.36 52 90.4 47 PRIME URBAN Gyotoku II Ichikawa-shi, Chiba 741,000 1.0 1,244.00 58 100.0 48 PRIME URBAN Gyotoku Ekimae Ichikawa-shi, Chiba 476,000 0.6 778.19 37 94.6 49 PRIME URBAN Nishi Funabashi Funabashi-shi, Chiba 772,000 1.0 1,237.80 60 96.7 50 URBAN STAGE Azabu Juban Minato-ku, Tokyo 991,000 1.3 1,222.13 40 94.8 51 URBAN STAGE Hatagaya Shibuya-ku, Tokyo 452,000 0.6 650.60 38 100.0 52 URBAN STAGE Toritsu Daigaku Meguro-ku, Tokyo 524,000 0.7 996.81 16 93.9 53 URBAN STAGE Kachidoki Chuo-ku, Tokyo 2,290,000 3.0 4,481.82 144 93.4 54 URBAN STAGE Naka Ochiai Shinjuku-ku, Tokyo 655,000 0.9 1,237.98 18 100.0 55 URBAN STAGE Ochiai Shinjuku-ku, Tokyo 324,000 0.4 517.53 32 96.8 56 URBAN STAGE Roka Koen Setagaya-ku, Tokyo 362,000 0.5 567.20 34 97.1 57 URBAN STAGE Kamiuma Setagaya-ku, Tokyo 900,000 1.2 1,739.86 37 99.1 58 URBAN STAGE Sangen Jaya Setagaya-ku, Tokyo 755,000 1.0 1,018.72 47 98.2 59 URBAN STAGE Chitose Karasuyama Setagaya-ku, Tokyo 730,000 1.0 1,774.01 27 96.2 60 URBAN STAGE Sangen Jaya II Setagaya-ku, Tokyo 539,000 0.7 810.98 17 87.1 61 URBAN STAGE Komazawa Setagaya-ku, Tokyo 396,000 0.5 572.41 26 96.9 62 URBAN STAGE Karasuyama Setagaya-ku, Tokyo 344,000 0.5 507.52 28 89.8 63 URBAN STAGE Oimachi Shinagawa-ku, Tokyo 530,000 0.7 722.70 45 91.1 64 URBAN STAGE Oimachi II Shinagawa-ku, Tokyo 1,100,000 1.5 1,719.82 92 97.8 65 URBAN STAGE Yukigaya Ota-ku, Tokyo 970,000 1.3 1,536.59 94 94.6 66 URBAN STAGE Ikegami Ota-ku, Tokyo 1,460,000 1.9 2,456.48 95 100.0

32 Portfolio (as of the end of the 2nd Fiscal Period)

Acquisition Price Percent of Leasable Leasable Occupation Rate # Name of Property Location (Thousands of Yen) Total (%) Space (㎡) Units (Units) (end of 2nd FP) 67 URBAN STAGE Nakano Nakano-ku, Tokyo 472,000 0.6 801.30 51 90.9 68 URBAN STAGE Takaido Suginami-ku, Tokyo 1,080,000 1.4 1,746.20 107 94.5 69 URBAN STAGE Komagome Toshima-ku, Tokyo 412,000 0.5 990.18 19 100.0 70 URBAN STAGE Mukojima Sumida-ku, Tokyo 487,000 0.6 1,108.91 55 92.8 71 URBAN STAGE Ekoda Nerima-ku, Tokyo 385,000 0.5 872.49 35 97.4 72 URBAN STAGE Takinokawa Kita-ku, Tokyo 287,000 0.4 554.39 29 90.5 73 URBAN STAGE Asakusa Taito-ku, Tokyo 350,000 0.5 876.70 22 100.0 74 URBAN STAGE Machiya Arakawa-ku, Tokyo 210,000 0.3 455.19 26 92.5 75 URBAN STAGE Koganei Koganei-shi, Tokyo 229,000 0.3 682.43 27 97.2 76 URBAN STAGE Hino Hino-shi, Tokyo 319,000 0.4 994.68 54 88.9 77 URBAN STAGE Musashi Kosugi comodo Kawasaki-shi, Kanagawa 2,150,000 2.9 3,690.37 56 98.4 78 URBAN STAGE Tsurumi Teraya Yokohama-shi, Kanagawa 457,000 0.6 952.06 50 98.0 79 URBAN STAGE Tennocho Yokohama-shi, Kanagawa 136,000 0.2 332.48 20 90.0 80 URBAN STAGE Urayasu Urayasu-shi, Chiba 277,000 0.4 437.94 27 100.0 81 URBAN STAGE Minami Gyotoku I Ichikawa-shi, Chiba 357,000 0.5 682.05 41 100.0 82 URBAN STAGE Minami Gyotoku II Ichikawa-shi, Chiba 285,000 0.4 611.61 37 75.7 83 URBAN STAGE Minami Gyotoku III Ichikawa-shi, Chiba 263,000 0.3 543.84 33 58.1 84 URBAN STAGE Minami Gyotoku IV Ichikawa-shi, Chiba 256,000 0.3 535.08 32 90.7 85 URBAN STAGE Minami Urawa Saitama-shi, Saitama 274,000 0.4 694.05 32 97.0 86 URBAN STAGE Yono Honmachi Saitama-shi, Saitama 519,000 0.7 1,372.74 70 100.0 87 Cosmo Gracia Yotsuya Gaien Higashi Shinjuku-ku, Tokyo 1,700,000 2.3 1,759.61 51 95.4 Vicinity of Tokyo (Sub Total 87 Properties) 69,806,000 92.6 100,646.28 4,074 95.4 88 PROUD FLAT Itsutsubashi Sendai-shi, Miyagi 682,000 0.9 1,861.56 60 97.3 89 PRIME URBAN Yamahana Sapporo-shi, Hokkaido 377,000 0.5 1,518.58 33 94.5 90 PRIME URBAN Kita Juyo Jo Sapporo-shi, Hokkaido 336,000 0.4 1,155.60 36 93.6 91 PRIME URBAN Odori Koen I Sapporo-shi, Hokkaido 530,000 0.7 1,850.20 53 100.0 92 PRIME URBAN Odori Koen II Sapporo-shi, Hokkaido 322,000 0.4 1,148.72 36 100.0 93 PRIME URBAN Aoi Nagoya-shi, Aichi 724,000 1.0 1,571.04 46 98.1 94 PRIME URBAN Esaka I Suita-shi, Osaka 672,000 0.9 1,189.12 48 100.0 95 PRIME URBAN Esaka II Suita-shi, Osaka 790,000 1.0 1,392.00 57 100.0 96 Benefis Hakata Grand Sweet Fukuoka-shi, Fukuoka 830,000 1.1 2,176.23 67 98.5 97 Benefis Yakuin Minami Fukuoka-shi, Fukuoka 351,000 0.5 897.84 34 100.0 Other Areas (Sub Total 10 Properties) 5,614,000 7.4 14,760.89 470 98.2 Total 75,420,000 100.0 115,407.17 4,544 95.8

33 Scheduled Acquisitions After the 2nd Fiscal Period

Scheduled Acquisitions Determined During the 1st Fiscal Period Scheduled Leasable Leasable Scheduled Name of Property Location Acquisition Price Units Space (㎡) Acquisition Date (Thousands of Yen) (Units) PROUD FLAT Yokohama (tentative name) Yokohama-shi, Kanagawa 2,340,000 3,118.12 113 March 14, 2008 PRIME URBAN Hakusan Bunkyo-ku, Tokyo 893,000 1,069.82 42 February 29, 2008 Vicinity of Tokyo (Sub Total 2 Properties) 3,233,000 4,187.94 155 PRIME URBAN Kita Juichi Jo (Note) Sapporo-shi, Hokkaido 600,000 1,851.39 60 February 27, 2008 PRIME URBAN Miyanosawa (Note) Sapporo-shi, Hokkaido 576,200 2,114.53 54 February 27, 2008 PRIME URBAN Odori Higashi (Note) Sapporo-shi, Hokkaido 424,000 1,494.36 36 February 27, 2008 PRIME URBAN Chiji Kokan (Note) Sapporo-shi, Hokkaido 337,900 1,007.30 42 February 27, 2008 PRIME URBAN Maruyama (Note) Sapporo-shi, Hokkaido 283,200 911.07 27 February 27, 2008 PRIME URBAN Kita Nijuyo Jo (tentative name) Sapporo-shi, Hokkaido 503,700 1,773.90 36 February 29, 2008 PRIME URBAN Sapporo Idaimae Sapporo-shi, Hokkaido 731,600 2,439.90 58 March 26, 2008 PRIME URBAN Kanayama (tentative name) Nagoya-shi, Aichi 632,000 1,391.02 58 February 29, 2008 PRIME URBAN Tsurumai (tentative name) Nagoya-shi, Aichi 1,189,096 2,502.11 104 March 5, 2009 Other Areas (Sub Total 9 Properties) 5,277,696 15,485.58 475 Total 11 Properties 8,510,696 19,673.52 630 (Note) Acquisitions that have been completed by February 28, 2008.

Scheduled Acquisitions Determined During the 2nd Fiscal Period Scheduled Leasable Leasable Scheduled Name of Property Location Acquisition Price Units Space (㎡) Acquisition Date (Thousands of Yen) (Units) PROUD FLAT Shibuya Sakuragaoka (tentative name) Shibuya-ku, Tokyo 800,000 638.70 30 April 21, 2008 PROUD FLAT Shinjuku Kawadacho (tentative name) Shinjuku-ku, Tokyo 1,010,000 1,102.20 41 April 21, 2008 PROUD FLAT Shinotsuka (tentative name) Toshima-ku, Tokyo 695,000 752.09 35 April 21, 2008 PROUD FLAT Monzen Nakacho II (tentative name) Koto-ku, Tokyo 650,000 830.55 35 April 21, 2008 PRIME URBAN Meguro Ohashi Hills (tentative name) Meguro-ku, Tokyo 3,580,000 2,955.74 99 March 21, 2008 PRIME URBAN Denenchofu Minami (tentative name) Ota-ku, Tokyo 900,000 1,100.17 44 March 21, 2008 PRIME URBAN Nakano Kamitakada (tentative name) Nakano-ku, Tokyo 640,000 818.75 33 March 3, 2008 URBAN STAGE Gyotoku Ekimae (Note) Ichikawa-shi, Chiba 561,000 927.33 46 December 4, 2007 URBAN STAGE Minami Gyotoku V (Note) Ichikawa-shi, Chiba 293,000 662.68 38 December 4, 2007 URBAN STAGE Gyotoku (Note) Ichikawa-shi, Chiba 948,000 1,766.47 77 February 15, 2008 PROUD FLAT Shirogane Takanawa (tentative name) Minato-ku, Tokyo 3,510,000 2,950.11 106 September 5, 2008 PROUD FLAT Monzen Nakacho I (tentative name) Koto-ku, Tokyo 1,130,000 1,191.08 55 August 5, 2008 Vicinity of Tokyo (Sub Total 12 Properties) 14,717,000 15,695.87 639

34 Scheduled Acquisitions After the 2nd Fiscal Period

Scheduled Leasable Leasable Scheduled Name of Property Location Acquisition Price Units Space (㎡) Acquisition Date (Thousands of Yen) (Units) Benefis Kashii Verbena Fukuoka-shi, Fukuoka 396,000 1,231.79 39 March 5, 2008 Benefis Hakata Higashi Grand Sweet Fukuoka-shi, Fukuoka 693,000 1,856.92 65 March 19, 2008 Benefis Chihaya Grand Sweet Fukuoka-shi, Fukuoka 545,000 1,738.87 48 March 28, 2008 Other Areas (Sub Total 3 Properties) 1,634,000 4,827.58 152 Total 15 Properties 16,351,000 20,523.45 791 (Note) Acquisitions that have been completed by February 28, 2008.

Scheduled Acquisitions Determined After the 2nd Fiscal Period (as of February 28, 2008) Scheduled Leasable Leasable Scheduled Name of Property Location Acquisition Price Units Space (㎡) Acquisition Date (Thousands of Yen) (Units) PROUD FLAT Kamioooka (tentative name) Yokohama-shi, Kanagawa 2,770,000 4,872.17 200 March 19, 2008 URBAN STAGE Shinkawa (Note) Chuo-ku, Tokyo 2,250,000 3,600.61 46 December 14, 2007 URBAN STAGE Hongo Ikizaka (Note) Bunkyo-ku, Tokyo 647,000 662.58 27 December 12, 2007 URBAN STAGE Shinjuku Ochiai (Note) Shinjuku-ku, Tokyo 635,000 1,053.39 28 December 12, 2007 URBAN STAGE Kamikitazawa (Note) Setagaya-ku, Tokyo 738,000 1,384.45 29 December 12, 2007 URBAN STAGE Kawasaki (Note) Kawasaki-shi, Kanagawa 1,150,000 1,706.46 80 February 26, 2008 Koganei Habitation (Note) Koganei-shi, Tokyo 2,390,000 5,999.80 98 December 12, 2007 Musashino Green Hills (Note) Koganei-shi, Tokyo 1,590,000 2,970.50 78 December 14, 2007 Vicinity of Tokyo (Sub Total 8 Properties) 12,170,000 22,249.96 586 PRIME URBAN Nagamachi Icchome (Note) Sendai-shi, Miyagi 1,110,000 3,411.24 60 February 1, 2008 PRIME URBAN Yaotome Chuo (Note) Sendai-shi, Miyagi 428,000 1,380.21 43 February 1, 2008 Other Properties (Sub Total 2 Properties) 1,538,000 4,791.45 103 Total 10 Properties 13,708,000 27,041.41 689 (Note) Acquisitions that have been completed by February 28, 2008. Total of All the Mentioned Properties (Scheduled) Leasable Leasable Acquisition Price Units Space (㎡) (Thousands of Yen) (Units) Total Acquired Properties/Scheduled Acquisitions (133 Properties) 113,989,696 182,645.55 6,654

35 Interest-bearing Debts (at the end of the 2nd Fiscal Period)

Amount Lender Type of Interest Interest Rate Date of Repayment Collateral (Millions of Yen)

2 Financial Institutions 1,000 Floating Rate 1.08500% February 26, 2008 Unsecured Short-term Loan Unguaranteed 3 Financial Institutions 3,360 Floating Rate 1.13667% September 29, 2008 Short-term Loan 3 Financial Institutions 4,360 －－－－ Sub Total 5 Financial Institutions 4,500 Floating Rate 1.17000% August 27, 2009 Fixed Rate 6 Financial Institutions 5,000 1.46045% February 27, 2010 (Note 1) 1 Finacial Institution 440 Floating Rate 1.14667% February 27, 2010 Fixed Rate 6 Financial Institutions 3,500 1.84464% September 30, 2011 (Note 2) Fixed Rate 7 Financial Institutions 11,000 1.79300% February 27, 2012 (Note 1) Unsecured Long-term Loan Unguaranteed 2 Financial Institutions 2,200 Fixed Rate 1.81375% August 27, 2012

1 Finacial Institution 800 Fixed Rate 1.99875% September 30, 2013 Fixed Rate 2 Financial Institutions 2,000 2.14360% February 27, 2014 (Note 1) 1 Finacial Institution 2,000 Fixed Rate 2.13625% February 27, 2014

1 Finacial Institution 1,300 Fixed Rate 2.23500% February 27, 2015 Long-term Loan 14 Financial Institutions 32,740 －－－－ Sub Total Total 14 Financial Institutions 37,100 －－－－

(Note 1) This loan has started the Interest Rate Swap transaction on February 27, 2007. (Note 2) This loan has started the Interest Rate Swap transaction on May 31, 2007.

36 Unitholders (at the end of the 2nd Fiscal Period)

Number of Unitholders and Investment Units

Other Domestic Corporations Foreign Corporations Foreign Individuals (127 unitholders) (63 unitholders) Corporations (9,970 units) (4,927 units)

Financial Institutions (Including security companies) (129 unitholders) Individuals Other Domestic Corporations Financial Institutions (4,811 unitholders) (14,112 units) (Including security companies) (39,091 units) Total Number of Unitholders：5,130 Total Number of Investment Units：68,100 units

Top 10 Unitholders

Unitholders Units Ratio 1 Nomura Real Estate Development Co., Ltd. 12,500 18.36% 2 Tokio Marine & Nichido Fire Insurance Co., Ltd. 5,000 7.34% 3 NikkoCiti Trust and Banking Corporation 4,892 7.18% 4 Japan Trustee Services Bank, Ltd. 4,800 7.05% 5 The Master Trust Bank of Japan, Ltd. 3,060 4.49% 6 North Pacific Bank, Ltd. 2,203 3.23% 7 Trust & Custody Services Bank, Ltd. 1,826 2.68% 8 The Bank of Ikeda, Ltd. 1,471 2.16% 9 Asahi Fire & Marine Insurance Co., Ltd. 1,323 1.94% 10 The Nomura Trust and Banking Co., Ltd. 1,035 1.52% Total 38,110 55.96%

37 Organization of the Asset Management Company

Shareholders Meeting Corporate Data of NREAM Auditors Name Board of Directors Nomura Real Estate Asset Management Co., Ltd.

Executive Director Established Compliance January 24, 2003 Compliance & Risk Committee Management Group* Capital ¥300,000,000 Office Residence Management Division Management Division Shareholder Investment Investment Nomura Real Estate Holdings, Inc. (100%) Committee Committee

Representative Tatsuo Inoue, President & CEO

Asset Fund Asset Fund Acquisition Financial & Acquisition Financial & Management Management Management Management Group Control Group Group Control Group Description of Business Group Group Group Group Asset management business for investment corporations (J-REITs) ■ Business ■ Business ■ Business ■ Business relevant to due relevant to the relevant to the relevant to the diligence and operations, management funding, Registration & Licenses acquisition of management, of the portfolio accounting, properties. and disposition of investment taxation, and ■Registered for a financial instruments business: of real estate assets and management Director of Kanto Local Finance Bureau No. 374 *Compliance & Risk Management Group under disclosure (IR). of capital for ■ Business relevant to the compliance, risk management, management. investment ■Licensed for discretionary proxy in realty trading: and internal audits of the asset management company. assets. Minister of Land, Infrastructure and Transport No. 18 ■Licensed for real estate trading: Governor of Tokyo No. (2) 81679 NRF Management Division

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Compliance Committee

Report on all deliberation minutes and investment decisions on the agenda

Decision Making approves only vote is unanimousif only approves , and Main Items Examined ItemsMain The Fund’s basic policy concerning investing and concerning policy basic Fund’s The of the Selection Fund’s acquisition target proposals. Fund’s assetmanagementconcerning policy The such asconcerning itemsimportant Fund’s policy The financing, etc. financing, managing managing assets. assets. portfolio ■ ■ ■ ■ Residence Management Division Investment Committee Investment Division Management Residence multifaceted reviews analysis reviews and multifaceted ) Main Items Examined ItemsMain Compliance Committee Compliance Deliberating the contents of the Deliberating transaction with there compliancerelated whether are Checking Checking the state of compliance with laws, laws, with statethe of compliance Checking regulations and and rules regulations related to the proposals. parties. related through the of issuesexamination or process by made decisionsthe Investment investment Committee. ■ ■ ■ When there are no compliance related related related there no there no issuesissuesare are WhenWhencompliancecompliance Transactions with related parties require approval by the Compliance Committee, including two members external Compliancetwo Committee,including the by approval require parties with related Transactions (attorney/expert All projects require prior approval by the compliance officer before making proposal makingbefore officer compliance the by prior approval require projects All Unanimous vote by all members with voting rights (drafter and the compliance officer does not have voting rights) voting have not does officer compliance the (drafterall rights and with voting members by vote Unanimous reached Heads of each division division performseach Heads of (Note) For uncompleted properties, appraisal value calculated by the real estate appraiser using appraisal methodsappraisalappraiserusingestatereal theby calculatedvalue appraisalproperties,(Note)uncompleted For related party party related Acquisition price must meet or be lower than the appraisal value* by an independent real estate appraiser that is not a a not is that appraiser real estate independent by an value* appraisal the lower be than meet priceor must Acquisition *    ⇒

Checking the state of compliance  with laws, regulations and rules and whether there are any transactions with related parties

Compliance Officer

Submission of proposal Committee Committee Investment Investment Proposal to Proposal Resolution by the by Resolution

Proposal Acquisition Property Decision making process proven through the listed REIT listed the through proven process making Decision Rules for transaction with related parties related with transaction for Rules Focus on Compliance on Focus This document has been prepared solely for the purpose of provision of information and should not be construed as an offer, solicitation or commercial conduct of any nature associated with any specific products. Investors wishing to purchase the investment units of Nomura Real Estate Residential Fund, Inc. should contact their own securities brokers or dealers.

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